Notes for a speech by
Benoit Labonté
President,
Board of Trade
Metropolitan Montreal
Developing e-business in Quebec
During a luncheon conference
as part of the forum
Commerce traditionnel, commerce électronique et portails
Lyon, December 1, 2003
Mr. President of the University Jean Moulin,
Mr. President Agnès,
Mr. Bideau,
Mr. Jean-Marie Toulouse, director of the École des Hautes Études de Montréal,
Mrs. Glasgow of the Canadian Embassy,
Distinguished guests,
Ladies and Gentlemen:
Greetings to you all.
I am very pleased to be here with you today as part of the Entretiens Jacques-Cartier.
I would like to speak to you today about a new business reality that is a major concern for the Board of Trade of Metropolitan Montreal and at the core of any real business transformation.
I'd like to talk to you not about e-commerce but about e-business.
But what exactly is e-business?
It can be, for example:
online training programs;
online financial transactions;
real time management of inventories and production lines; and
online order changes.
In contrast, e-commerce is basically limited to buying and selling online.
Because it applies directly to business processes and management practices, and because it promotes innovation, e-business is a powerful lever for improving productivity and competitiveness.
For manufacturing companies, for example, boosting productivity typically begins by implementing or perfecting manufacturing processes, for instance, by buying more sophisticated equipment or improving the assembly line.
In contrast, for service companies, which are increasingly the driving force of our knowledge economy, there is really only one way of enhancing productivity and that is by improving business processes.
The successful company of the future will be the one that can consolidate and integrate manufacturing and e-business processes into a single management concept.
In today's highly competitive context, locally, nationally and internationally, e-business is no longer a luxury but an essential strategic necessity for companies to develop their full potential and, by extension, to gain invaluable competitive advantages such as real time access to strategic information and the ability to quickly react to changes in the business environment.
Therefore, whether it's to better track changing customer needs, to know the competition or to quickly react to increases in the cost of raw materials, integrating e-business practices makes it possible to generate real productivity gains.
Yet despite these clear benefits, companies are only just beginning to think about how to strategically use these new business practices.
What we must do is encourage them to quickly think beyond e-commerce, which as I mentioned earlier, tends to be limited to online transactions.
Almost all business management practices, from human resources to procurement and business development, can be improved by new e-business applications.
And let me assure you, the productivity gains are not at all theoretical.
To show you how real they are, I'd like to share with you the results of a recent study conducted by our federal department, Industry Canada. According to this study, companies that have integrated e-business have achieved, on average, revenue increases of 7%, reduced their cost of goods sold by 9.5% and trimmed administrative and general expenses by 7%.
Clearly then, if we apply these figures to a company with annual sales of 10 million euros and a profit margin of 20%, this company would see its net profits skyrocket by up to 154%!
However, in Quebec and Canada, SMEs face some obstacles to adopting e-business, two of which have captured the attention of the Board of Trade of Metropolitan Montreal.
The first is the lack of structured awareness and guidance initiatives for SMEs to help them with their e-business efforts. In other words, few programs exist whose purpose is to demystify e-business for small- and mid-sized enterprises, which are all too often left to their own devices. As a result, Canadian SMEs are still too slow to adopt e-business practices.
Although they are adopting electronic business at about the same pace as French companies, our SMEs lag well behind their American counterparts. And given that we are part of NAFTA, this situation is at the very least, unacceptable.
The second obstacle is the dearth of specialized e-business resources to support them in their efforts. While there are many technical resources on the market, there are few e-business management experts, and those that do exist generally work in large organizations.
As well, because e-business is an emerging sector, the consulting services in this field consist of resource people who do not always have the necessary skills to guide SMEs, which end up no longer knowing where to place their trust.
These roadblocks delay their evolution towards integrating e-business into their business processes.
Notwithstanding these problems, we can still build on the favourable conditions that do exist. As such, at the end of 2001, over 70% of Quebec businesses with more than five employees used the Internet and 30% of them used it for e-commerce.
This is a very good starting point
Always intent on contributing to the prosperity of its members and the greater business community, the Board of Trade of Metropolitan Montreal has become actively involved in promoting e-business skills as a tool for innovation, productivity and competitiveness.
Indeed, the Board of Trade was a pioneer in this regard by creating the Electronic Commerce Institute in 1990.
Since January 2003, the Institute has been integrated into the Board of Trade as a service branch whose mission is to promote and accelerate e-business adoption by SMEs.
In fact, ECI's executive director, Claude Riopel, is here today among us.
Two major areas of intervention today allow the Board of Trade to accomplish its e-business mission and to offer innovative solutions.
First, ECI's knowledge transfer activities make it possible to sensitize and teach SMEs about the strategic importance of e-business. Plus, the training seminars we develop are based on a very simple approach: pragmatism.
In addition to training SMEs directly, the Institute also works with their IT managers and e-business consultants. Thus, in 2001 ECI created a professional e-business certification program that trains resource people who work primarily with SMEs. This 50-hour university-level certification is recognized and credited by the École des Hautes études commerciales de Montréal, a world-class academic institution.
In fact, also here with us today is Paul Mireault, a professor at HEC Montréal who, together with Claude Riopel, is responsible for the 2004 Entretiens Jacques-Cartier symposium in Montreal, which this year carries the theme E-business, productivity and competitiveness.
With over 300 certifications granted in three years, Quebec SMEs are increasingly better served by qualified professionals who, in their way, are helping step up the adoption of e-business. Indeed, this professional certification is available on a global scale. What that means is that French consultants and interested parties can register and follow the program online.
The second area of intervention of this service branch is e-business planning consulting. In this regard, the Electronic Commerce Institute supports and guides a pan-Quebec network of consultants who work in all regions of Quebec with manufacturing SMEs interested in the leverage e-business offers.
The interventions of the Institute also have the great advantage of being neutral, impartial, short term, and I would like to underscore once again, pragmatic.
These interventions cover all the stages leading to the selection and implementation of an e-business project and make it possible to significantly reduce the associated risks by emphasizing planning.
Good planning allows companies to implement core projects that have a direct impact on their productivity and growth. Since April 2000, almost 1,000 Quebec manufacturers have benefited from the guidance provided by the network of consultants supported by the e-business service branch of the Board of Trade.
In the near future, the Board of Trade will step up the key role it plays in encouraging SMEs to adopt e-business practices by, notably, supporting government efforts aimed at increasing the number and quality of online services offered to companies.
The Board of Trade is also planning to make its unique expertise available to the other Canadian provinces.
Beyond that, new core projects are being developed to increase services to Quebec SMEs, such as the creation of an e-business bid management portal for SMEs and their service suppliers, and the implementation of a pilot expertise centre in the Gaspésie area, a remote region of Québec.
In short, although e-business is still in its infancy, its potential is enormous.
In conclusion, I would like to briefly speak about another major issue that we must be prepared for: the emergence of knowledge management technologies.
Knowledge management is essentially the ability of a company to maintain, manage and share its knowledge. This becomes a crucial issue since a company's real value will increasingly be measured by its knowledge.
The matter of knowledge loss is of growing concern in Quebec since, in terms of demographics, we are about to witness a major wave of retirements and the potential loss of knowledge of an entire generation. This trend is being felt equally in the public sectors of education and health and in the private sector.
Integrating knowledge management solutions and creating knowledge-sharing networks will be invaluable tools to help companies and governments address this problem.
The Board of Trade does not claim to be able to simultaneously address all these issues that are shaping the economic fabric of the next decade. However, our ability to identify them is an important step in helping us adequately prepare our some 7,000 members.
Today, the Board of Trade actively contributes to stimulating business innovation, productivity and competitiveness. We hope that our involvement will help our enterprises not only survive but prosper.
Thank you.